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Which of the following is an example of accrued revenue?

a. Snow removal services that has been provided and paid for on the same day.

b. An agreement that has been signed for snow removal services for the next three months.

c. Snow removal services that have been provided but have not been billed or paid.

d. Snow removal services that have been paid for three months in advance.

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Joshua Stredder
Joshua StredderLv10
19 Jan 2021
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Related questions

Terri has an annual contract with Jackson Mortgage Brokers toprovide property maintenance services; this includes lawn care,snow removal and parking lot maintenance. Terri spends, on average,20 hours per week working at the company’s premises and is paid aflat amount monthly. She hires part-time workers, when necessary,to assist her. Terri does not have any other clients. Terri usesher own small tools; however the company supplies and maintains ariding lawn mower and a snow plow for her use. Her contact at thecompany is Glenn Simpson, the Facilities Manager, who meets withher every Monday to discuss the work to be done that week. Glennapproves Terri’s monthly invoices and submits them to AccountsPayable. Does Terri have a contract of service or a contract forservice with Jackson Mortgage Brokers? As the company’s PayrollSupervisor, explain to Glenn the process and factors you used tomake your decision. [300-500 Words]

Joe’s Snow PlowingCompany has the following transactions for theyear:

December 1 – Issued 10,000 shares of capital stock for $100,000to start a snow plowing business.

December 1 - Paid a one year insurance premium costing$7,200.

December 1 - Purchased a snow plow costing $42,000. Paid cash of$22,000 and signed a 3 year, 6% note for the balance. Interest isto be paid annually. The balance of the note will be paid at theend of its term. It is estimated that the snow plow last 4 yearsand will have a $6,000 value after 4 years.

December 3 – Purchased $8,000 of supplies on credit. Picked upthe supplies on the same day.

December 10 - Paid gas expense of $2,000.

December 12 - Purchased supplies costing $1,800 on credit.Picked up the supplies on the same day.

December 18 – Plowed 18 driveways totaling $32,000 and billedcustomers.

December 23 – Plowed 3 driveways and billed customers$1,800.

December 28 - Received $22,000 from customers for drivewaysplowed in #7..

December 28 – Ordered supplies costing $8,000 to be delivered inJanuary.

December 31 - Paid for supplies purchased in #6.

Paid employees $6,000 wages.

December 31 - Received $5,000 for a snow plowing job to be donein January next year.

December 31 - Paid a $0.25 per share dividend.

Required:

1. Prepare journal entries for the abovetransactions.

2. Post the above transactions to the ledger (use TAccounts).

3. Prepare a Trial Balance.

4. Prepare adjusting entries in journal format and postto the ledger (T Accounts). Following additional information isprovided:

Supplies on Hand December 31 was $4,000.

Wages owed but not paid on December 31 was$2,000.

Hint: Plus adjusting entries for depreciation, insuranceand interest.

5. Prepare an Adjusted Trial Balance.

6. Prepare an Income Statement, Statement of RetainedEarnings and a Balance Sheet.

7. Prepare closing entries in journal format and post tothe ledger (T Accounts).

8. Prepare a Post-Closing Trial Balance.

1. Using accrual accounting, revenues are recorded

a. when cash is received without regard to when the services are performed or products have been delivered to customers.

b. when a service has been performed or products have been delivered to customers without regard to when cash is received.

c. when cash is received at the time services are performed or products have been delivered to customers only if cash is received.

d.after the services are performed or products have been delivered to customers.

 

2. Deferred revenue is revenue that is

a. earned and the cash has been received.

b. earned but the cash has not been received.

c. not earned and the cash has not been received.

d. not earned but the cash has been received.

 

3. Adjusting entries always include

a. only income statement accounts.

b. only balance sheet accounts the cash account.

c. at least one income statement account and one balance sheet account.

 

4. Which of the following is considered to be an accrued expense?

a. a computer technician has installed the latest software updates and was paid on the same day

b. a computer technician has been paid in advance to install software updates as they become available

c. a computer technician has just signed an agreement with you regarding pricing for future work

d. a computer technician has installed the latest software updates, but you have not received an invoice or made payment

 

 

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